Tips for Buying a Real-Estate Owned Property in Massachusetts
Here are some tips for buyers interested in purchasing REOs:
- Find a specialist. Check newspaper and online ads to see which agents handle REOs. Typically, banks have just a handful of brokers handling all of their local foreclosure sales.
- Get loan pre-approval. The really good deals on REOs go quickly, and the buyer doesn’t necessarily have time to try to work out the financing afterward. So, experts recommend getting pre-approved for a mortgage before even looking at foreclosed properties.
- Study “comps.” How do you decide how much money to offer for a foreclosure? Simple: The same way you determine how much to offer in traditional transactions – by checking “comps.” “Comps” are the prices that comparable listings in the same neighborhood recently sold for.
- Also look at how quickly nearby foreclosures have been selling. The best advice on a bank-owned property is to come in at your highest and best, unless the property has been sitting on the market forever with no activity.
Remember that REOs are sold “as is.” Don’t expect the bank to cut its price to compensate for any repairs that a foreclosed home requires.
After all, banks base list prices on how much nearby foreclosures recently sold for – and those properties probably needed work, too.
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